4 Reasons Why Culture Is More Important than Strategy

Recognize This! – “Strategy will only succeed if it is supported by the appropriate cultural attributes.”

Late last year, Booz & Co. released research in Strategy +Business showing “Why Culture Is Key.” Of course, this is the central point of our book Winning with a Culture of Recognition, and it’s encouraging to see these research results on the importance of culture to organization success.

The research is quite good, but these four key points in particular stood out (all quotes from the research):

1) Culture is more important than strategy.

“Culture matters, enormously. Studies have shown again and again that there may be no more critical source of business success or failure than a company’s culture – it trumps strategy and leadership. That isn’t to say strategy doesn’t matter, but rather that the particular strategy a company employs will succeed only if it is supported by the appropriate cultural attributes.”

Think about this in terms of Zappos, for example. Zappos strategy is to be the best in customer service. To achieve that strategy, Zappos created a culture of happiness (their term). That culture is reliant on training employees well, trusting them to do their jobs well, and respecting the decisions they make.

2) Companies who align culture and strategy are more successful than those that don’t.

“Our data shows that companies with unsupportive cultures and poor strategic alignment significantly underperform their competitors…. In fact, companies with both highly aligned cultures and highly aligned innovation strategies have 30% higher enterprise value growth and 17% higher profit growth than companies with low degrees of alignment.”

Alignment is clearly critical, but an ever-greater struggle as priorities and strategies change more rapidly than ever before. Strategic employee recognition plays a foundational role in helping employees understand changing strategy so they can stay aligned with business needs in their every-day tasks. You can ensure employees stay aligned by adjusting the reasons for recognition in your strategic program and encouraging all employees to frequently and in-the-moment praise their colleagues for delivering on those expectations.

3) Encouraging individual cultural attributes is the key to strategic and cultural alignment.

“We believe the way to [achieve much higher degrees of cultural and strategic alignment] lies in gaining a greater understanding of the cultural attributes that any given company needs to foster, given its particular innovation strategy.”

Defining those cultural attributes is unique to every organization. Think of these attributes as your core values. What are the behaviors and actions you need and expect from every employee in order to achieve your strategic objectives? Those behaviors are your cultural attributes.

4) Maintaining a successful culture takes careful attention and hard work.

“Yet even the most successful companies concede the difficulty of maintaining the cultures that led to their success. Palensky of 3M, certainly one of the most consistently innovative companies ever to exist, describes the challenge: ‘That’s the thing about cultures – they’re built up a brick at a time, a point at a time, over decades. You need consistency; you need persistence; you need gentle, behind-the-scenes encouragement in addition to top-down support. And you can lose it very quickly.’”

As Wally Bock pointed out and I elaborated on in this post, corporate culture is a bit like a bonsai tree. It can be steadfast and strong, but it requires deliberate nurturing to grow in a particular way. One bad chop can also kill the culture you’ve worked for years to create.

How critical to success is company culture perceived in your organization?

Derek Irvine

About Derek Irvine

The VP of Client Strategy and Consulting at Globoforce, Derek Irvine is one of the world’s foremost experts on employee recognition and engagement, helping business leaders set a higher vision and ambition for their organizations. As a renowned speaker and co-author of Winning with a Culture of Recognition, he teaches companies how to use recognition to proactively manage company culture. Derek holds a B.Comm and Masters of Business Studies from the Smurfit Graduate Business School at University College Dublin.

15 Responses

  1. Mike Brown says:

    Company culture is huge. The best company cultures are the ones that are not for everyone… Certain people will be turned off by the culture – and that is a good thing…

    For example – our culture is very entrepreneurial – very hands-on… We had this one new employee ask about the table he was going to be getting in his new office… We knew he would not be a very good fit…

    There is a test I do with new employees – who are more senior… I bring them to lunch in the first few weeks – to this diner I love going to… It is small and it is a dive – but the waitresses are fun… If the new employee is uncomfortable there – it is a pretty good gauge that they will not succeed… Thank you for the post…

  2. Derek Irvine Derek Irvine says:

    Excellent point, Mike. Thank you for adding to the conversation.

    I like the test. It’s similar to one I do. At a meal-based interview, I very carefully observe how the candidate treats the host, the server, etc. If the candidate is rude or otherwise condescending, he or she will certainly not fit within our culture as we very strongly believe in the value and importance of every employee and every role in achieving our vision and mission.

  3. [...] Culture matters. Recognition matters. Everywhere in the world. [...]

  4. [...] CEOs – other than Tony Hsieh of Zappos, of course – actually think about the company’s culture and core values to the extent of using the values as means to hire, fire, promote and reward [...]

  5. [...] are the front line in making your customers happy. You must start with your employees. You must create a culture in which your employees can thrive – which leads to this Vision & Values statement from [...]

  6. [...] are the front line in making your customers happy. You must start with your employees. You must create a culture in which your employees can thrive – which leads to this Vision & Values statement from Wells [...]

  7. [...] off the plaque on the wall and brings them to life in the daily work of employees. Now you’ve created a culture in which employees are praising (and being recognized for) good behaviors, not just good [...]

  8. [...] more important? Strategy or culture? I’ve written my own opinions based on research from Booz & Co. The argument continues on, with this perspective I [...]

  9. [...] more important? Strategy or culture? I’ve written my own opinions based on research from Booz & Co. The argument continues on, with this perspective I [...]

  10. [...] Earlier this week I wrote about creating a culture of creativity, as Danny Boyle did to create and direct the Olympic opening ceremonies. How does that translate to the workplace or the more common phrase we often hear of creating a culture of innovation? [...]

  11. [...] is the only differentiator that can’t be copied. “The most important thing about culture is that it’s the only [...]

  12. [...] written several posts on this point. Without culture, strategy cannot be fully effective. Employees agree, yet [...]

  13. [...] written several posts on this point. Without culture, strategy cannot be fully effective. Employees agree, yet [...]

Leave a Reply

Current day month ye@r *

Navigation